The initial public offering of Entero Healthcare Solutions will close for public subscription today. The company has so far received a rather weak response from investors, who have subscribed it 0.19 times or just 19 per cent.

The ₹1,600-crore IPO has come out with a price band of ₹1,195-1,258 a share of face value of ₹10 each. Bids can be made for a minimum of 11 equity shares.

As against 71.50 lakh shares (net-off anchor investors), the IPO received bids for 13.86 lakh shares.

The IPO consists of a fresh issue worth ₹1,000 crore, and an offer-for-sale (OFS) of up to 47,69,475 shares by the promoters and other investors aggregating to ₹600 crore. The promoters selling shareholders are Prabhat Agrawal, Prem Sethi and OrbiMed Asia III Mauritius Ltd.

Undersubscribed

Entero Healthcare Solutions has reserved not less than 75 per cent of the offer for qualified institutional buyers (QIB), not more than 15 per cent for non-institutional Institutional Investors (NII), and not more than 10 per cent for retail investors. The respective portions were undersubscribed even at the end of Day 2.

While the retail portion was subscribed 0.88 times, non-institutions subscribed their quota 0.09 times. QIBs are yet to make a bid. It has reserved shares worth up to ₹8 crore for its employee, who will get a discount of ₹119 a share. The staff quota was subscribed 0.77 times.

Anchor investors

As part of the IPO exercise, Entero Healthcare Solutions has allotted 56,94,753 shares at ₹1,258 a share to 25 anchor investors and raised ₹716 crore.

Among the marquee investors in the anchor book were Capital Group, GIC, TT Emerging Markets Unconstrained Fund, Premji, Carmignac Portfolio, Amundi Funds New Silk Road, Amundi Funds Asia Equity Concentrated, Bajaj Allianz Life Insurance Company Ltd., SBI General Insurance Limited, Jupiter India Fund, The Jupiter Global Fund-Jupiter India Select, Smallcap World Fund, Inc, Government Of Singapore, Monetary Authority Of Singapore, Pioneer Investment Fund Scheme II, Mirae Asset India Sector Leader Equity Fund, Mirae Asset India Blue Chip Equity Master Investment Trust, CLSA Global Markets Pte. LTD-ODI, Allianz Global Investors Fund-Allianz Asian Multi Income Plus, Private Client Emerging Markets Portfolio, NVIT Emerging Markets Fund, Barclays Multi-Manager Fund Plc, Magna Umbrella Fund PLC - Magna EM Income And Growth Fund, Universal Sompo General Insurance Company Limited, Societe Generale – ODI, Morgan Stanley Asia (Singapore) Pte. – ODI, Goldman Sachs (Singapore) Pte. – ODI and Copthall Mauritius Investment Limited - Odi Account.

Utility of funds

The company intends to use the net proceeds from the fresh offering to finance the company’s long-term working capital needs for FY2025 and 2026; to pursue inorganic growth initiatives through acquisitions; and for general corporate purposes.

Repayment or prepayment of certain borrowings that the company has taken out may be done in full or in part, the company said in the DRHP.

The IPO’s book-running lead managers are ICICI Securities Ltd, Dam Capital Advisors Ltd, Jefferies India Private Limited, JM Financial Ltd and SBI Capital Markets. The issue’s registrar is Link Intime India Private Ltd.

About Entero

Entero Healthcare Solutions Ltd, incorporated in 2018, is a distributor of healthcare products in India through an organised technology-driven platform. The company provides healthcare product distribution services to pharmacies, hospitals, and clinics.

For retail pharmacies, it provides over 64,500 SKUs (stock keeping units), with real-time inventory records. They also offer order fulfilment and claims settlement.

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